Bounced Check Sold To Collection Agency

Q: This past July, I bounced a $29 check to my nail salon. Four days later, I put enough cash into the account to cover the bounced check but my check was never redeposited.

In September, I received a scary letter from a collection agency asking me to contact them by telephone. I left two messages. When they finally called back, they stated they were collecting $119 for the bounced check.

I talked to the nail salon owner who said he sold the collection company the right to recover the check for $10.

When I talked to my bank, the Georgia Governor’s Office of Consumer Affairs, and the Federal Trade Commission, I was advised by all of them that the collection agency was only entitled to $29 plus a reasonable fee of about $20.

Throughout the end of September and early October, I left messages for the collection company to call me. I planned to offer them $49. They never returned the call. When I checked my November bank statement, I saw why they didn’t bother calling me back.

The collection agency had done paperwork through my bank and pretended as though I had made a phone payment. They debited $119 to replace the check I bounced, and another $95 to replace a made-up check number they picked out of the blue.

My bank’s investigator credited my account back for those two amounts, and debited the collection agency.

On my bank’s advice, I closed that checking account and opened up a new one so they couldn’t debit my account again.

I owe someone $29 and the reasonable fee. I’d like to give it to the nail salon, but am wondering if I have an obligation to the collection agency. I also need to know who to notify regarding the collection company’s stealing from my account. This really has me worried.

A: I’d like to say I’m appalled by the thought of a collection agency going as far as to tap your checking account for whatever amount they like — and then double dip for a second check just because they could.

But this isn’t as uncommon as you might imagine for this industry and my apologies now to any collection agency that runs a legitimate business. But the collection business is notorious for doing and saying anything that will get someone to cough up payment of a debt.

The other day, I spoke to a woman who had been hounded by a collection agency that wanted to collect on a credit card debt owed by her deceased husband. The company called her as much as 23 times in a single day — a clear violation of the Fair Collections Act. While you do admit to bouncing a check, you are trying to make good on it — but to no avail.

You’re being thwarted by a company that believes it has the right to demand a 400 percent markup of your original payment. On the other hand, even if you do owe them $29 plus the reasonable fee, there’s no excuse for stealing.

Since it appears that the collection company did steal from you (and those funds have been returned to you), it’s time to strike a deal that allows you to move on with your life and allows the collection agency to move on to more fertile ground.

Tell the collection company that you will pay what you owe plus a reasonable $20. They should either accept your offer, and mark it “paid in full” and remove the negative information from your credit history, or you will start to file complaints with state and federal regulatory agencies.

With regard to the stealing of cash from your account, the attorney general’s office in Georgia might be very interested to know what is going on. I’d start by calling them.

Clearly, this situation is messy and it will take time and patience to sort it all out. What could you have done differently to have avoided it?

When your check bounced, you should have immediately called the nail salon to speak to the manager and apologized. You should have taken cash over and paid what you owed. That way, you would have avoided this sticky situation. Since the implementation of Check 21, the new check processing law, all checks are digitized and settled through electronic transfer. That means you’d better make sure you have the funds in your account before you actually sign and date your check or you could easily bounce another check.